For Manhattan and Hamptons Housing, A Falling Tide Sinks All Boats

Holy cow, the Hamptons are affordable! Well, not really, but they are certainly more affordable this year than last, according to a new Douglas Elliman-Miller Samuel report (PDF). It’s abundantly clear that the collapse of the Wall Street economy is largely to blame here, and the wild spending out in the Hamptons, where moguls of all shapes, sizes and colors competed for prime real estate, is over, at least until the Manhattan-based economy picks up again.

In the Hamptons, the first-quarter average sales price dropped from $1,945,358 in 2008 to $1,313,735 in 2009; the $631,623 price chop represents an alarming 32.5 percent drop. The sleepier North Fork fared worse, with a 42.6 percent year-to-year drop in the average home price and a 13.6 decline in the median.

And what of the delicate symbiosis between Manhattan and the Hamptons? At first glance, Manhattan appears to be holding up better; in the first quarter of 2009, there were modest gains in both the average and median sales prices in Manhattan, which is surprising. But the numbers don’t really tell the entire story. Most of the price gains are attributable to the market in newly built condos, which included some dated data that skewed the overall numbers. In the more accurate and timely re-sale market, the first quarter median sales price in Manhattan fell 20.8 percent annually.

But enough of the bad news: After all, there are some winners here. As Rick Hoffman, the senior vice president in Corcoran’s East End sales office, acknowledged recently, it’s a renter’s market there this summer. The inventory of unsold homes on the market in the Hamptons and the North Fork skyrocketed to 2,289 this quarter, up 23.9 from 2008. Would-be sellers may very likely be inclined to rent their homes out for severely reduced prices. Enjoy the beach!